Hillicon Valley: Supreme Court takes up Apple case | Senate votes to block ZTE deal | Officials testify on Clinton probe report | Russia's threat to undersea cables | Trump tells Pentagon to create 'space force' | FCC begins T-Mobile, Sprint deal review

Hillicon Valley: Supreme Court takes up Apple case | Senate votes to block ZTE deal | Officials testify on Clinton probe report | Russia's threat to undersea cables | Trump tells Pentagon to create 'space force' | FCC begins T-Mobile, Sprint deal review
© Greg Nash

The Cyber and Tech overnights have joined forces to give you Hillicon Valley, The Hill's new comprehensive newsletter detailing all you need to know about the tech and cyber news from Capitol Hill to Silicon Valley.

Welcome! Follow the cyber team, Olivia Beavers (@olivia_beavers) and Morgan Chalfant (@mchalfant16), and the tech team, Harper Neidig (@hneidig) and Ali Breland (@alibreland), on Twitter. Send us your scoops, tips and hot NBA trade rumors

 

SUPREME COURT TO HEAR APPLE APPEAL: The Supreme Court said Monday that it would hear Apple's appeal in a class action lawsuit that alleges the iPhone maker has monopolized the app market.

The consumers who brought the lawsuit argue that they pay higher rates because Apple exclusively distributes iPhone programs through its App Store and charges developers a 30 percent fee on paid apps.

ADVERTISEMENT

Apple, which has denied violating any antitrust laws, argues that the consumers have no legal ground to bring an antitrust suit against them, since the developers are the ones who are closest on the distribution chain.

The Supreme Court has previously ruled that only "the overcharged direct purchaser, and not others in the chain of manufacture or distribution" have the right to bring antitrust cases. Now, the court will decide whether users or app developers are Apple's direct purchasers when it comes to its App Store.

Apple has argued that it doesn't sell apps directly to consumers but essentially rents out space in its App Store to developers.

But the plaintiffs argue that users who purchase apps pay Apple directly which then passes on 70 percent of the fees to developers.

"We are glad to see that the Supreme Court will hear the merits of the case," Morgan Reed, president of the App Association, said in a statement. "We feel confident they will find that platforms do not have property interest in the apps they host, and consumers remain indirect purchasers of the platforms."

More on the case here.

 

SENATE VOTES TO BLOCK TRUMP'S ZTE DEAL: The Senate moved to block President TrumpDonald John TrumpGillibrand urges opposition to Kavanaugh: Fight for abortion rights 'is now or never' Trump claims tariffs on foreign nations will rescue US steel industry: report Bannon announces pro-Trump movie, operation team ahead of midterms: report MORE's deal to save Chinese telecommunications giant ZTE despite pushback from the White House.

Senators passed an annual defense policy bill on Monday that included a provision keeping the penalties in place against ZTE despite a deal reached earlier this month by the Trump administration.

Also in the bill: In addition to keeping the Commerce Department penalties in place, the bill bans government agencies from buying or leasing telecommunications equipment and services from ZTE and Chinese telecom firm Huawei, as well as banning the government from providing loans to or subsidizing either company.

Who was behind the bill? Sens. Charles SchumerCharles (Chuck) Ellis SchumerElection Countdown: GOP worries House majority endangered by top of ticket | Dems make history in Tuesday's primaries | Parties fight for Puerto Rican vote in Florida | GOP lawmakers plan 'Freedom Tour' Senate Democrats should stop playing politics on Kavanaugh Montana GOP Senate hopeful touts Trump's support in new ad MORE (D-N.Y.), Chris Van HollenChristopher (Chris) Van HollenTrump draws bipartisan fire over Brennan New sanctions would hurt Russia — but hurt American industry more Dems ask Mnuchin to probe Russian investment in state election tech MORE (D-Md.), Tom CottonThomas (Tom) Bryant CottonRubio slams Google over plans to unveil censored Chinese search engine Bipartisanship alive and well, protecting critical infrastructure Exclusive: Bannon blasts 'con artist' Kochs, 'lame duck' Ryan, 'diminished' Kelly MORE (R-Ark.) and Marco RubioMarco Antonio RubioRubio’s pro-family, conservative family leave policy promotes stability Dems make history in Tuesday's primaries Establishment-backed Vukmir wins Wisconsin GOP Senate primary MORE (R-Fla.) spearheaded the effort.

White House pushback: The White House has signaled it fight to remove the measure.

"The Administration will work with Congress to ensure the final NDAA conference report respects the separation of powers." said Hogan Gidley, a deputy press secretary for the White House.

We've got more on the vote here.

For more background on the fight, click here.

 

JUSTICE WATCHDOG TESTIFIES ON CLINTON PROBE REPORT: Justice Department Inspector General Michael Horowitz on Monday emphasized that the detailed, heavily critical report that his office issued last week does not levy judgment on special counsel Robert MuellerRobert Swan MuellerSasse: US should applaud choice of Mueller to lead Russia probe MORE's investigation into the Trump campaign's alleged ties to Russia.

Although Horowitz carefully declined to directly contradict President Trump's claim that the report "exonerates" him, he noted that it "does not touch on the Russia investigation."

"We did not address the credibility of the special counsel's investigation here," he said, during a three-hour Senate hearing on Monday that quickly became a referendum on whether the report indicates the Mueller probe has already been tainted by bias.

The report, which was made public on Thursday, evaluates decision-making within the Department of Justice during the investigation into former Secretary of State Hillary ClintonHillary Diane Rodham ClintonGillibrand urges opposition to Kavanaugh: Fight for abortion rights 'is now or never' Bannon announces pro-Trump movie, operation team ahead of midterms: report Fox News host hits Giuliani: Dossier isn't why Mueller probe was started MORE's use of a private email server.

In the days since its release, Trump has claimed that the document "went a long way to show that… the Mueller investigation has been totally discredited," and key Republicans have begun to call for the investigation to wrap up. 

From the beginning, Republicans on Thursday argued that the report shows FBI investigators gave Democratic candidate Clinton a "kid glove" treatment during the 2016 election, compared to the "bare-knuckle" tactics employed in the Mueller probe.

Democrats, meanwhile, repeatedly pressed Horowitz on unorthodox disclosures made by former FBI director James ComeyJames Brien ComeyTucker Carlson attacks press as ‘state media’ after Trump strips ex-CIA chief’s clearance Comey: Trump revoking Brennan's security clearance shows 'he will punish people who disagree with him' Trump draws bipartisan fire over Brennan MORE that they say helped elect Donald Trump, as well as alleged leaks to Trump campaign surrogate Rudy Giuliani.

To read our piece on the hearing click here, and for our play by play live coverage click here.

 

NEW RUSSIAN THREAT: The Trump administration's new sanctions on Russia are casting light on the threat posed to the undersea cables that carry the world's electronic communications between continents.

The Treasury Department sanctioned five Russian firms and three Russian nationals this week for aiding the Kremlin's domestic security service, the FSB. One of the companies is alleged to have provided support for Moscow's "underwater capabilities" -- including producing diving systems and a submersible craft for the FSB.

The Treasury Department alleged that Russia has been "active" in tracking underwater fiber optic cables that transmit communications across continents.

The threat to undersea cables is multifaceted. Foreign adversaries could track their whereabouts to sabotage them and cut rivals off from communications.

Or they could be motivated by espionage. There has long been suspicion that Moscow is actively targeting these cables for spying purposes.

Read the full story here.

 

FCC OPENS REVIEW ON T-MOBILE-SPRINT: The Federal Communications Commission (FCC) has launched the regulatory review for T-Mobile's proposed $26 billion acquisition of Sprint.

The FCC on Friday opened a docket for the merger and issued a protective order allowing the companies to shield sensitive documents submitted to the agency from public view.

A spokeswoman for FCC Chairman Ajit Pai did not immediately respond when asked for comment, but Pai wrote to members of Congress last week promising to "thoroughly review" whether the deal is in the public interest.

 

SPACE FORCE!: President Trump on Monday announced that he's directing the Pentagon to create a "space force" as the Defense Department's sixth military service branch.

"I'm hereby directing the Department of Defense and Pentagon to immediately begin the process necessary to establish a space force as the sixth branch of the armed forces," Trump said during a meeting with members of the National Space Council (NSC). "That's a big statement. We are going to have the Air Force and we are going to have the Space Force, separate but equal."

Not so fast: Military officials, however, have been lukewarm on the idea in the past.

The House Armed Services Committee last year attempted but failed to establish in the annual defense policy bill a separate space corps within the Air Force. Air Force leaders, Defense Secretary James MattisJames Norman MattisOvernight Defense: Bolton heading to Geneva for Putin summit follow up | Pentagon spokeswoman under investigation | Trump statement on defense bill objects to Russia, Gitmo measures Pentagon spokeswoman investigated for misusing staff: report Hundreds gather in Yemen to mourn children killed in Saudi-led coalition airstrike MORE and Joint Chiefs of Staff Chairman Gen. Joseph Dunford all opposed it.

The military heads warned it would be premature to create a separate space entity and add burdensome bureaucracy to the service.

And lawmakers say they get to decide: Sen. Bill NelsonClarence (Bill) William NelsonElection Countdown: GOP worries House majority endangered by top of ticket | Dems make history in Tuesday's primaries | Parties fight for Puerto Rican vote in Florida | GOP lawmakers plan 'Freedom Tour' Google releases archive of online political ads The Hill's Morning Report — GOP seeks to hold Trump’s gains in Midwest states MORE (D-Fla.) pushed back on President Trump's declaration that the Pentagon will create a new military branch dedicated to space, warning that such a move will "rip the Air Force apart."

"The president told a US general to create a new Space Force as 6th branch of military today, which generals tell me they don't want," Nelson wrote on Twitter shortly thereafter. "Thankfully the president can't do it without Congress because now is NOT the time to rip the Air Force apart. Too many important missions at stake."

 

SQUARE EYES CRYPTO: The digital payment company Square has obtained a license that will allow New York state residents to buy and sell Bitcoin through its mobile payments app, Cash.

The company announced on Monday that it had received the license from New York's Department of Financial Services (DFS). It is the ninth company to receive the license.

The DFS said in a statement that it conducted a "comprehensive review" of the Cash app's policies on matters regarding anti-money laundering, anti-fraud, capitalization, consumer protection and cybersecurity policies. The financial watchdog said it will continue to supervise the app's operations.

Jack Dorsey, the founder and CEO of Square, is a cryptocurrency enthusiast, saying in the past that he is a "huge fan" of bitcoin and other digital assets.

 

AN OP-ED TO CHEW ON: Net neutrality has been repealed, but Congress could still bring it back. (The Hill)

 

NOTABLE LINKS FROM AROUND THE WEB:

Amazon shareholder proposal opposed the company's facial recognition tech. (CNN)

WhatsApp's role in spreading fake news. (The Guardian)

House Intelligence Democrats share some new Facebook ads purchased by Russian trolls, which highlight voter suppression efforts.

New documents detail extent of Tesla layoffs. (Bloomberg)

Mergers would make AT&T, Comcast most indebted companies. (Wall Street Journal)

Google invests in Chinese retailer. (New York Times)

SurveyMonkey confidentially registers for initial public stock offering.